Uranium at Ranger 3 Deeps and Jabiluka estimated at more than $25 billion

More than $25 billion of uranium and more than $1.25 billion in royalties will be lost if the nuclear fuel is left in the ground at Ranger mine near Jabiru

Miners at work in ERA's Ranger 3 Deeps Underground Mine.

More than $25 billion of uranium and more than $1.25 billion in royalties will be lost if the nuclear fuel is left in the ground at Ranger mine near Jabiru.

The Mirrar traditional owners indicated they did not want to extend the life of the processing of uranium oxide, which ends in 2021, in October last year. Energy Resources of Australia has agreed to the wishes and will not seek an extension. It is currently reviewing its business.

The in-situ value of Ranger 3 Deeps and Jabiluka is estimated at more than $25 billion even at the current depressed prices for the nuclear fuel.

In 2015, royalty payments to the indigenous community and the NT Government totalled $17.9 million. The equivalent of 4.25 per cent of Ranger sales revenue is paid to Northern Territory-based Aboriginal organisations, including the Gundjeihmi Aboriginal Corporation. The remaining 1.25 per cent of royalties derived from Ranger sales revenue is paid to the Commonwealth and distributed to the NT Government.

Royalty payments are expected to decline in line with forecast production rates.

ERA’s recent annual report warns the business risks that could adversely affect the financial performance of the company include undeveloped resources. “The Company has significant undeveloped uranium resources at Ranger 3 Deeps and Jabiluka,” the report says. “In 2015 the ERA board determined that development of the Ranger 3 Deeps project would not proceed to final feasibility study in the current operating environment.

“This was, in part, due to the board’s assessment that the economics of the project required operations beyond the current Ranger Authority, which permits processing operations until January 2021.”

The report states “should this consent not eventuate in the future, the Jabiluka Undeveloped Property would face full impairment.”

ERA chairman Peter Mansell said the newly constituted board must now, as a matter of priority, review the business and set the direction and strategy for ERA for the medium to long-term and optimise short-term cash flow.

“As one of only three uranium mines currently producing in Australia and one with large resources, ERA is in an enviable position to capitalise on the changing sentiment towards nuclear energy ... made as part of the global effort to address climate change,” he said.